How do I have customers with a tax-exempt status?

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Posted 6 years ago

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Mike F., Alum

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It is possible to have customers that are tax-exempt which you can setup using multiple customer groups. In the following article, we will walk you through the process of allowing wholesale customers to purchase without charging tax, while retail customers do pay tax.

Disclaimer: This shows you how this can be done within the BigCommerce software, however we are not recommending that everyone do this. We recommend that you check with your local state/region and comply with any laws regarding wholesale sales tax. Each state has something simliar to a Department of Revenue that sets these type of regulations. Below is an example of some external information on this topic:

"When you sell wholesale you do not charge sales tax on the order (the retailer will tax the customer for each item at time of purchase and that will be paid to the state as sales tax on that item.) Tax laws vary from state to state but in general, you must keep a copy of each of your retailers resellers' licenses and must not sell wholesale (without sales tax) to anyone without one.

There are also resources available with critical information as well in addition to the forms you will need to start a business."

The above info was taken from:

<h2>Video Overview</h2>
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1.) Login to your store's control panel.
2.) Click on Customers and then Customer Groups.


3.) Click on the Create a Customer Group button.


4.) Name the group Retail, and click the checkbox next to All new customers should be added to this group.
5.) Click Save.


6.) Click the Create a Customer Group button again.


7.) Name the group Tax-Exempt, and click Save.


8.) Click on Settings and then Tax Settings.


9.) Click on the Tax Rates & Zones tab.


10.) Click Edit Settings on the applicable tax zone.


11.) Scroll down to the bottom and click the radio button next to Only customers in these groups: in the Tax applies to area.


12.) Now, click the checkbox next to Retail, and click Save.


13.) You can see that the system will list which customer groups are currently being charged tax in the Tax Zones display.


Now, only customers that are in the Tax-Exempt customer group will be free from paying sales tax. Since we put all new customers in the Retail category, you will need to make sure to change the group of any customer you add if you want them to be tax-exempt. This will ensure that a customer that arrives to your store organically (or from a promotion, etc.) will be charges sales tax appropriately.

Customers checking out as a guest will be charged tax by default if you follow this method. If you want to ensure a failsale (or assign them to a different customer group), you can do this by going to Settings -> Store -> Miscellaneous (tab).


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